The Nation Newspaper

Category: Energy

  • Solid minerals sector can contribute 3% to GDP, says PwC

    I am quite optimistic that if the right steps are taken and the momentum is sustained, the solid minerals sector in Nigeria can contribute up to three per cent of the Gross Domestic Product (GDP) by 2025 as predicted in the current roadmap, up from a contribution of just about 0.5 per cent, the Advisory Partner and Mining Leader at PricewaterhouseCoopers (PwC) Nigeria, Cyril Azobu has said.

    Azobu said: “My vision for the sector is one that is profitable to all stakeholders and in which the Nigerian people are able to enjoy the maximum benefits possible ffrom these natural endowments.”

    He spoke against the backdrop of the upcoming Nigeria Mining Week  taking place in Abuja from October16-19, in which there is partnership between PwC, the Miners Association of Nigeria (MAN) and event organisers Spintelligent.

    The strategic mining investment platform will link investors, project developers, financiers, technology providers and government to share best practices and demonstrate the latest strategies to evolve the sector successfully.

    According to Azobu, several important developments in the mining sector in the last year bode well for the industry’s future.

    “Perhaps the most significant is the approval in August 2016 of a new roadmap for the sector by the government. This very important policy document has really set the tone for the development of the sector. Following from this, we have seen the constitution of the Mining Implementation and Strategy team whose duty is to co-ordinate the implementation of the roadmap and programme manage its execution.”

    “Furthermore, the Federal Government also approved N30billion Mining Intervention Fund. A significant proportion of the fund has gone into data gathering and a part of it is to go into capacity building for artisanal miners. We are also seeing the Federal Government making efforts to take advantage of some strategic minerals such as Steel and Bitumen but all of these are still in the early stages.”

  • BEDC, Thames Energy, Delta seal 20Mw plant deal

    Efforts at ensuring that over 200 commercial entities in Ozoro Local Government Area of Delta State benefit from power supply have got a boost as the Benin Electricity Distribution Plc (BEDC) signs a Memorandum of Understanding (MoU) with Thames Energy Limited and the Delta State Government on the construction of 20megawatts (Mw) power plant.

    The MoU signing ceremony, which took place at BEDC head office in Benin, Edo State capital, signaled a tripartite partnership that is expected to galvanize the potentials of several commercial entities in addition to rejuvenating the economy of the Isoko people, as well as make the area an economic hub for Delta State.

    BEDC Managing Director/Chief Executive Officer, Mrs. Funke Osibodu, according to a statement from the company, said the company was poised to make the project a reality with a view to improving on the socio-economic development of the Isoko people and Delta State.

    Mrs Osibodu stated that no urban renewal or development would be complete without power supply, adding that BEDC’s involvement in the deal was necessitated by the quest and commitment to improve the quality of life of customers through the provision of reliable and stable electricity supply.

    The firm’s Executive Director, Commercial, Dr. Abu Ejoor, also commended the people of Ozoro for creating a peaceful and friendly environment for the project to take off. He said the project when completed will improve the lots of the people, create jobs, reduce poverty and create enterprise.

    Also, Thames Energy Limited Managing Director, Mr. Akpovi Oyo, assured that the power plant project would be completed within 18 months, saying that power was one of the biggest industries which required tapping into to enable sustenance of the economy.

    According to him, the rationale for the project is to ginger the state to improve the lot of people, create jobs and reduce poverty, explaining that “it is an off-grid project where 20mw of electricity will be installed in the first phase, while the second, third and fourth phases will come be based on demand.

    “In a couple of weeks, a ground breaking ceremony will be held for construction to kick off immediately,” he said, adding that Delta State required five of such power plants in key areas.”

    The Delta State Commissioner for Urban Renewal, Hon. Ilolo Oghenekaro, commended BEDC for its display of professionalism in the packaging of the project, noting that the government was committed to the development of key infrastructure that will improve the economy.

    He said: “You cannot renew any urban centre without critical infrastructure like power, hence the basis for the Delta State Government’s partnership with BEDC and Thames Energy on the project.

    “Power is one of the biggest industries that is emerging out of the 21st industry, which will be bigger than telecoms and there is need to key in into the sector in such a way that it will help everybody. Delta State is willing to provide any form of assistance to make this project a success.”

    He stated that when completed, the project would boost business activities and create jobs, adding that it is a watershed. He expressed hope that the partnership will bear fruit.

    Isoko nation President-General, High Chief Iduh Amadhe praised  BEDC’s commitment to Isoko nation assuring that they will create an enabling environment for the project to succeed.

  • Nigerian businesses on Shell entrepreneurship innovation prize list

    Three Nigerian entrepreneurs have been shortlisted for Shell LiveWIRE ‘Top Ten Innovators’, a global competition, which highlights and rewards LiveWIRE businesses that demonstrate excellence in innovation.

    The Nigerians have come up with creative ideas on energy efficiency and access to chemical and paint products, and join 22 entrepreneurs from nine countries to vie for the prestigious prize. A public vote of the shortlisted businesses takes place September 1 – 8, 2017, with the results helping to determine the winners.

    “We are pleased at the opportunity for the Nigerians to showcase their talent on the global stage using Shell’s flagship entrepreneurship development programme,” said Igo Weli, General Manager, External Relations, Shell Petroleum Development Company of Nigeria Limited (SPDC).

    “SPDC launched the LiveWIRE programme in Nigeria in 2003, providing training, business development services and start-up capital for youth-owned businesses. Our ambassadors have benefited from this support to make their mark and we call on Nigerians to encourage them by voting for their ideas,” he added.

    ‘Top Ten Innovators’ is a worldwide competition open to the alumni of Shell LiveWIRE, a Royal Dutch Shell Social Investment Programme, operating in 15 countries, which enables young people to start their own business and create employment.  The shortlisted entrepreneurs have the chance to win a top prize of $15,000, three Runner-up prizes of $10,000 or six Merit awards of $5,000. The programme aims to create role models for other young entrepreneurs, and demonstrate that introducing innovation supports growth and job creation.

    Shell’s Vice President Social Performance, Joanna Cochrane, said: “Shell LiveWIRE is very important to us because when we help local entrepreneurs to set up businesses, they create long term sources of income for communities, they create jobs and they help to find innovative solutions to social and economic problems.”

    The businesses shortlisted are Nigeria De-rahbs Energy Services, which produces, installs, services and repairs solar energy equipment, and also provides training to future engineers and energy entrepreneurs.

    Others include Nigeria Emobella Engineering Nigeria Limited, which provides engineering services with a USP of 24hours availability and high-quality customer service, and Nigeria Fendwall Paint and Chemical Products, which produces and retails household and commercial paint products via a business model supporting low-income customers to access their products.

    You can vote for the organisation you want to win on the website: http://topteninnovators.shell-livewire.com.

    Since its introduction in Nigeria in 2003, the LiveWIRE programme has trained 6,550 Niger Delta youths in enterprise development and management, and provided business start-up grants to 3,313, Shell spokesperson, Nigeria, Bamidele Odugbesan said.

  • Guinness Nigeria boosts power sector with engineers

    Guinness Nigeria boosts power sector with engineers

    The first set of beneficiaries of the Guinness Nigeria Graduate Skills Development Scholarship scheme has graduated. The graduates, who represent the first set of Guinness-sponsored engineers, completed a year training at the National Power Training Institute of Nigeria (NAPTIN).

    At their graduation, Corporate Relations Director, Guinness Nigeria Plc, Mrs. Viola Graham-Douglas, said the objective of the collaboration with NAPTIN was to provide a pool of resourceful, competent and versatile engineers capable of delivering peerless technical services to further shore up the government’s transformation agenda in the power sector.

    She noted that the beneficiaries, having scaled all hurdles in the course of their training, have remarkably demonstrated high technical and leadership competencies, which are strongly believed will  help accelerate their career progression.

    Graham-Douglas further commended the beneficiaries for putting in so much hard work to earn  their certification. “You scaled through the competitive selection process for the scholarship; you excelled in the class-based component of the training and you successfully fulfilled the requirements of the job placement programme. Indeed, you should all be proud of your achievements,” she said.

    Also, Human Resources Director, Guinness Nigeria Plc, Bola Olajomi-Otubu, urged the NAPTIN-certified engineers to take advantage of their newly-acquired skills to propel their careers. She noted  that if well utilised, the skills gained can enhance their technical know-how, improve productivity, and ultimately induce value-added production capacity.

    She enjoined all the beneficiaries to take advantage of this knowledge transfer and be the best that they can be.

    NAPTIN’s Acting Director-General, Mr. Ahmed BolajiNagode, In his remarks, said: “The participation of Guinness Nigeria Plc is very noteworthy because the organisation is not a core player in the power business ecosystem,” noting that Guinness Nigeria’s commitment to youth development was commendable as it provided an example worthy of emulation by other non-core power sector players.

    The Graduate Skills Development Programme is one of three scholarship programmes Guinness Nigeria leverages to equip Nigerian youths with the skills they need to build successful careers and enhance their livelihoods. Others include: Guinness Nigeria’s technical training scholarship, which offers young school leavers a unique opportunity to study at the prestigious Institute for Industrial Technology (IIT), and an undergraduate scholarship scheme, which supports undergraduates from Guinness Nigeria’s host communities studying in tertiary institutions.

  • Oil field owners urged to lead modular refinery construction

    Oil field owners urged to lead modular refinery construction

    To address the challenges facing modular refinery construction in Nigeria, industry stakeholders have urged indigenous exploration and production companies, which own producing oil fields, to drive the initiative.

    Head, Energy Research Desk, Ecobank Plc, Mr. Dolapo Oni, said companies such as Seplat, Shoreline and Neconde should be leading modular refinery development. He noted that any investor, who wants to do  modular refinery that would produce different forms of fuel, including aviation kerosene for the purpose of selling locally and for export,  will face a big challenge if he is not a crude oil producer.

    He said: “If you look at refineries that have been developed in Nigeria that are successful, it is only one – Niger Delta Petroleum Resources Limited (NDPR). They own the field and built their refinery on their field, process their own crude and produce diesel at the rate they sell,” adding that it is the only model that can work for us here.

    Oni stressed the need to build refineries that can process crude from anywhere and any type of crude. He said: “You don’t just build refineries that can only process the Nigerian crude,” adding that:  “If you are not able to get constant supply of crude, that becomes a challenge to the refinery.”

    To him, one of the challenges facing the development of modular refineries in the country is sourcing for funds outside the country. He said Nigerian banks do not have much funds, and are already pressured by existing facilities to the oil and gas sector and cannot expand more.

    According to him, only a few of the top banks can provide some lending to the oil and gas sector, and refinery funding will be a challenge locally.

    “What it means in getting foreign funding is that you have to look at countries where refineries are gradually declining and they are looking to shift all that investments to somewhere else, countries like France and Italy.

    “Also, you look at countries that can provide export credit. For example, you can buy from the United States and they will be able to fund it, so with that you can actually bring it and refine it in Nigeria and, over time, you can pay them back.

    “But again, all these things, to some extent, require government’s guarantee as well. Government’s guarantee of crude feedstock was not for free because what some of them are asking is that they want government to guarantee them free crude not that they will not pay, but they will pay after the sale,” he said, adding that it can not work now.

    “Government should be able to guarantee that we get the crude to your refinery, but you must pay for the crude when it comes to you,” he insisted.

    He continued:“It will be a very big challenge because it means that products from the refineries have to be sold in dollars to foreign countries because you will pay back your funders in dollars.”

    Oni said banks were always looking for money to support the industry, adding that they would want to lend if they have the money and as long as the risks could be mitigated. According to him, banks are constantly talking with some foreign banks to complement the opportunity for lending, and more importantly, with participants in the industry.

    Ecobank, he said, had championed most of the modular refinery projects that had come up recently, adding it is talking to some of the foreign banks on how to raise money to assist them. “We look for possibilities of putting some money in them in terms of lending. We are trying our best and the best we can do is to talk to other foreign banks to see where we can get money for them,” he added.

    On revoking the licences of non-performing modular refineries, the Chairman, Integrated Oil and Gas Limited, Capt. Emmanuel Ihenacho, said the Federal Government should jettison the idea and focus on how to revitalise those refineries for optimum performance.

    He said the Department of Petroleum Resources (DPR) should be more concerned with how the operators start refining crude oil in the country and not clamping on them. DPR regulates the activities of the oil and gas industry.

    According to him, the DPR was stating the obvious when it said only two out of the 48 modular refinery licensees were working,  urging the DPR to temper justice with mercy over licensees whose refineries are yet to begin production.

    Speaking at a stakeholders’ forum in Lagos, he said the issue of optimising crude oil processing is what the country needs now  and not looking for scapegoats. Many firms have not been able to use their licences due to their inability to get funding from banks and other sources.

    Iheanacho said: “It is not that many operators do not want to process crude oil, but they do not have the means to do it. The funds are not just there. The local banks are not ready to provide them facility. When an operator goes to the bank, the banks give excuses. Owning and operating a modular refinery can cost even up to $2billion excluding getting a land for the project and carrying out due process on the project. At a point, the loan seekers would get frustrated by the antics of the banks, and before you know it, the licensee would abandon the idea of operating the refinery.”

    He said a modular refinery can be upgraded to suit the needs and the yearnings of its customers, adding that the refinery’s capacity can be upgraded to deliver 20,000 or 50,000 or even 100,000 barrels per day.

    Iheanacho said modular refineries have unique features as evident by the ways and manners their sizes and capacities are configured to meet the needs of their operators at any given time.

    DPR’s Deputy Director, Mr. Olumide Adeleke, said the government has given operators enough time to plan for the project, stressing that it is in the tradition of the agency to handle issues pertaining to the industry well. He said the government would not hesitate to carry out its oversight functions in the area of maintaining and promoting standards in the sector.

  • ‘Niger Delta indigenes need bailout for modular refineries’

    ‘Niger Delta indigenes need bailout for modular refineries’

    Ijaw Youth Council President, Pereotubo Roland Oweilaemi, is a lawyer. In this interview with AKINOLA AJIBADE, he speaks on conditions for peace in the Niger Delta region, restructuring and the need for a bailout for the region’s indigenes interested in owning modular refineries and marginal fields, among others.

    Two years into President Muhammadu Buhari’s administration, what is your take on peace in the Niger Delta?

    Peace in the Niger Delta is inevitable and must be achieved irrespective of who is at the helm of affairs. It is important and we are working tirelessly to ensure that there is peace in the Niger Delta and Ijaw territories, and the government at the centre is trying to settle down to attend to some of our demands. It is expected that we give them some time to dress the table and attend to the problems of the Niger Delta people

    Do you buy into the modular refineries programme, especially in view of the criticism that they are not profitable?

    With due respect, I don’t want to agree that modular refineries if properly handled are not viable. I don’t agree with the proponents of that ideology. Modular refinery is a good gesture by the Federal Government. It is just to move away from oil theft, to move away from illegal oil bunkering. but the worry is that the people, who are supposed to be empowered to do this are not the ones in charge. I mean the Niger Delta people,  the Ijaw people, who are involved in one form or the other, but are not doing the oil business properly. This is the essence of modular refineries. We find out that the government is not giving the sons and daughters of the Niger Delta the opportunity to own and operate modular refineries because the conditions to get them are very stringent.The financial involvement is very huge and we do not have that kind of money. So, we are calling on the Federal Government to relax these conditions to enable us also own and operate modular refineries, so that the peace we expect will continue to be part of the Niger Delta region.

    Are you aware that DPR has reduced the initial deposit from $1million to $150,000?

    Yes, I am aware and that’s still too much? It’s too much, we want further reduction. We have the oil, but we have not been managing this oil. We don’t have a stake in it so it should be relaxed. It should be brought down that we might also participate as equal owners in the project.

    Do you have colleagues in the Niger Delta, who have applied to  the DPR , because it said it was waiting for people to submit applications?

    How can you apply for something that you knew from the onset that you cannot start? You know the requirements, you have been given the requirements and from the word go, you know that you can’t do it. There is no miracle, conditions are stringent. We can’t apply and get it concluded logically, that is why we are saying that they should relax the conditions for us to be co-owners. You can’t say that the process is open and they expect people from Niger Delta, people from Ijaw extraction, to apply. How will they apply for something that they know that they won’t get at the end of the day? You already know the condition. The involvement, the logistics to put together to get a modular refinery is huge, that is why we are saying they should bring it down please.

    Do you expect a bailout or something similar for Niger Delta indigenes?

    That is what we expect. As a matter of fact, we are calling on the government to give us a time frame of about five to 10years, to get the modular refineries set up for a group of youths in the Niger Delta and say that from a particular time of the year, pay a certain amount to the Federal Government and at the end of the payment, you will become the owner of the refinery. That is palliative.

    So, what are you doing to reach out to those in authority concerning this particular issue?

    Yes, we were talking to them. I was with my elder brother, the Special Adviser on Amnesty, and we had fruitful discussions on how we will ensure that there is peace in the Niger Delta region. Of course, you will agree with me that where there is no peace, you can’t  attract  development, so, it is our responsibility to ensure, as youth leaders, that there is peace in the Niger Delta. That is the only panacea for development in the Niger Delta and we expect the government at different strata to do some basic things for us to get this peace we are looking for.

    Ogoni cleanup, do you see the project ongoing?

    It is unfortunate that we don’t seem to see what should be happening  now on site. The process is slow and we are not pleased about it. Ogoni is not the only place, it is peculiar, but it is not the only place that requires cleanup in the Niger Delta. There are so many places that are bastardised, our farmlands are gone, our aquatic life is gone, everything is gone. Our mothers cannot farm, they cannot fish. So, we need cleanup in almost every place in the Niger Delta, but you must start it from somewhere and that is why the government has decided to start from Ogoni. However, the speed we expected is not the speed we see on ground. I am calling on the government to ensure that Ogoni cleanup exercise is given priority attention.

    Federal Government plans marginal  fields bid round before the end of this year. How prepared are the Niger Delta youths to take advantage of this opportunity?

    We are very ready and capable to own and operate marginal fields, but the problem is that some people say we are not capable. We have gone through a lot of skills acquisition. We are being trained. We have Ijaw sons and daughters, people from the Niger Delta that can own marginal fields and operate it successfully.

  • NLNG seeks govt’s support for Trains 7&8

    NLNG seeks govt’s support for Trains 7&8

    The Nigeria Liquefied Natural Gas Limited (NLNG) has sought the support of the Federal Government for its proposed Trains 7& 8, a vehicle that it intends to leverage to expand the frontiers of processing and exporting gas globally.

    Its former Managing Director, Mr. Godswill Ihetu, said investing in gas processing and exporting is an ambitious one, which requires the support of its shareholders, adding that financial and material support from major partners are needed to achieve the desired result of sourcing for new markets  to boost the NLNG earnings.

    Ihetu told The Nation that Trains 7& 8 is a multi-billion dollar project that will boost the nation’s economy when it is completed, adding that Nigeria LNG is taking its time on the issue in view of its cost implications, approval from the government and building the plants.

    He said: “It is difficult stating the amount of money that would be expended on the project due to the sensitive nature of the oil and gas industry, more so, when NLNG has not mentioned the amount of money, which Trains 7&8 would gulp. The NLNG do not have a reliable figure yet, but given the fact the six Trains cost $9.4billion, one can have an idea of the cost of the proposed Trains, when one calculates and adds the inflation cost in the last few years the existing trains were installed.”

    According to him, the cost of buildings LNG Trains is high such that the Federal Government cannot bear it, adding that the need to involve Shell and two other oil majors in NLNG is imperative to achieve the goal of encouraging the growth of gas externally is imperative.

    He explained the three key elements needed, which include getting solid funding, seeking a viable market outside the shores of Nigeria and signing of Special Purchase Agreements (SPAs). These elements are important for obtaining Final Investment Decision (FID) for the two Trains. He urged the shareholders to work together to achieve the goal.

    Building of LNG Trains, Ihetu said, can only be effective, when the markets are available prior to the signing of Final Investment Decision.

    On Brass LNG and Olokola LNG, he said the two projects from inception were of great importance to the Federal Government, adding that funding has delayed their take-off.

    “Efforts were galvanised toward achieving the success of Brass and Olokola LNG, but the government does not have the money to make the projects work. This has prevented the two LNG projects from getting Final Investment Decisions needed for marketing gas abroad.  The thinking of the government then was that the cost of building two separate LN G plants would be too heavy for it to bear. The government was considering other projects under sleeve, which needed huge funding, therefore, did not deem it necessary to spend so much on the gas projects,” he added.

    He said President Muhammadu Buhari’s regime resuscitated the idea of establishing the Nigerian NLNG Limited by setting up what he described as LNG Working Committee between 1984 and1985, adding that the Committee formed what later transformed into Nigeria Liquefied Natural Gas in May 1989.

  • ‘Govt working for fuel self-sufficiency, export’

    Nigeria requires a mixture of bigger and modular refineries to achieve self-sufficiency in crude oil processing, to become an exporter of petroleum products in Africa, Deputy Director, Department of Petroleum Resources (DPR), Olumide Adeleke, has said.

    According to him, the four state-owned refineries – Port Harcourt 1 &2, Warri and Kaduna refineries are operating below installed capacities of 445,000 barrels per day (bpd), adding that it was a setback to the country’s goal of providing fuel for domestic market aside making fuel available for export.

    At an industry’s forum in Lagos, Adeleke said when Dangote Petrochemical and Refinery starts production in 2019, the country would be at an advantage to distribute enough fuel in the country, and  export the product to other countries.

    He said Dangote Refinery and other refineries are bigger platforms needed to refine crude oil, noting that the bigger a platform is, the higher the profit margin that accrues to the owner of the platform.

    The decision by the Federal Government to license operators that wish to invest in modular refineries few years ago, was part of efforts to encourage processing of crude oil in the country, he said.

    He, however, said the DPR, which issued the licences on behalf of the government, was not happy that the many of the operators are yet to begin processing of crude oil.

    Adeleke said: “While the government is making crude oil refining for domestic consumption by encouraging as many firms as possible to go into it, it is worthy of note that many of the firms that were licensed are yet to  show meaningful progress in that regard. To achieve self-sufficiency in the area of crude oil refining locally, private operators need to be up and doing by processing crude oil optimally.”

    According him, finance is a major setback to operators, who want to invest in refineries, adding that many operators are finding it difficult to get a minimum of $2billion required to operate a big refinery.

    This, Adeleke said, informed the decision of the government to arrange some finances for operators.

    On issue of co-location, Adeleke said col-location is good, when firms established for that purpose are situated where refineries are. He said co-location that is going on in Port Harcourt was as a result of the refinery in that region.  In Port Harcourt alone, co-location of about 100,000 barrels of crude oil is ongoing, a development, which is good for the country.

  • Planned NLNG Act’s amendment causes stir

    Planned NLNG Act’s amendment causes stir

    It was time to debate the proposed bill for an amendment of the Nigeria Liquefied Natural Gas (NLNG) Act before the National Assembly at a forum organised by energy reporters in Lagos. The bill seeks to compel the NLNG to pay three per cent of its yearly budget to the Niger Delta Development Commission (NDDC). Will the amendment be carried? EMEKA UGWUANYI, AKINOLA AJIBADE and AMBROSE NNAJI report.

    It was a no-holds-barred argument involving oil and gas industry stakeholders and a member of the House of Representatives, Simon Yakubu Arobo, on the proposed amendment to the Nigeria Liquefied Natural Gas (NLNG) Act. A bill, which is before the National Assembly, was on whether the amendment would be in the interest of Nigerians, or it would strangle the goose that lays the golden egg.

    It all happened at a forum organised by the Association of Energy Correspondents of Nigeria. The controversy over the amendment started in  February, last year, when Senator Patrick Nwaoboshi alleged that the NLNG had refused to pay its NDDC levy since it started commercial operation 16 years ago.  By that action, he claimed, the company had broken the law.

    Not long after Nwaoboshi’s statement, the House of Representatives backed his proposal for the NLNG’s (fiscal incentives, guaranteed and assurances) Act, Cap N87 of 2004 amendment. The 2004 Act exempts the NLNG from paying the NDDC levy.

    To the lawmakers, the NLNG has continued to hide under the pretext that the NLNG (Fiscal incentives, Guarantees and Assurances) Act exempted it from such contributions or payments.

    Discussing the implications of the amendment, the Chairman/Chief Executive Officer, Mentor Energy Consulting Limited, Mr. Victor Eromosele, said efforts to compel the NLNG to start paying the NDDC levy does not speak well of the country. According to him, the agreement between the Federal Government and NLNG must stand. To rescind on agreement as being planned by the National Assembly will not portray Nigeria as a dependable country to investors. He noted that the idea to have the LNG project by Nigeria was on the table for 30 years before the NLNG agreed to take the risk. Besides, the NLNG, according to him, is only a gas processing company and not gas producing company, adding that the NDDC Act stipulates that a gas producing company, like the NLNG, is not supposed to pay the NDDC levy.

    “The action of the legislators on the issue of amending the NLNG Act was wrong. It sends wrong signal to investors. Investors would be wondering why the country is changing its laws. Issues relating to contracts between the NLNG and its foreign investors would be adversely affected by the planned amendment,” he said.

    Former Minister of Power, Prof. Barth Nnaji,  said as a country, Nigeria’s yes must always remain so. Not yes at a point and no at the other. According to him, it kills investment and investors’ appetite to invest, adding that Nigeria should be a country that respects sanctity of agreement.

    To the Head, Energy Research Desk of Ecobank, Mr. Dalapo Oni, to compel the NLNG to pay the NDDC levy amounts to double taxation because the gas producer has already paid the levy. Besides, the timing of the proposed amendment is wrong. To him, considering the state of the economy, the lawmakers ought to be concerned about how to grow the economy, create more jobs, and build more LNG companies and plants. “We need to monetise our gas. We need to build more LNG firms,” he said.

    He asked the National Assembly which option was better, to support  investments’ inflow to develop more LNG plants and monetise gas or force a gas processing company  to pay NDDC levy?

    According to him, the National Assembly ought to be more concerned with reviving the OKLNG and Brass LNG as well as new LNG companies, adding that the lawmakers should be supporting the actualisation of the NLNG’s Trains 7&8, which will create 18,000 jobs and attract billions of dollars in investments.

    Oni, however, assumed that the current fight to force the NLNG to pay the NDDC levy was not a colouration from the past battle between the NDDC and the NLNG on the same issue of paying the levy. He noted that there are several gas processing companies that are not paying the NDDC levy and they are not being pursued as they have done to NLNG. “Instead of stifling companies that are doing well, we should focus on creating more viable firms,” he added.

    He continued: “The NLNG is proudly the country’s biggest and most successful indigenous company, run by 100 per cent Nigerian management and over 95 per cent Nigerian staff, yet competing effectively globally. Till today, it is the country’s highest tax payer and the fourth largest supplier of LNG in the world.

    “As one of the shareholders, the Nigerian National Petroleum Corporation (NNPC) gets dividends from the NLNG and the government also gets taxes from the NLNG, and when it has to part with that percentage of its budget for the NDDC, the amount they can share as dividends will also reduce because that will come from their profit.

    “We lose gas export window because right now, different LNG plants are being developed around the world including Mozambique, Tanzania, Cameron, Angola, and the Equatorial Guinea, and eventually the demand for our gas will be less, and normally, supply will affect the pricing of the LNG.”

    NLNG’s General Manager, External Relations, Dr. Kudo Eresia-Eke said the National Assembly is established to legislate for the country, urging the lawmakers to exercise restraints on issues affecting the existence of the country. He said the revenue the firm generates annually for the government is huge, adding that it is the country’s major revenue earner next to crude oil.

    “We cannot say that the National Assembly should not do its job, especially as regards making and amending law, but should tread softly on issues that can affect the earnings of the country.  The country’s interest should be paramount above other interests. The power the National Assembly has is our (Nigerians) power, and it should be used in our interest.”

    Arobo, a member of the House of Representatives’ Committee on Gas, had a different view. He said the NLNG cannot tie Nigeria’s hands forever.  “As a sovereign nation, we can review laws. We are not driving investors, we just want the NLNG to comply with the laws of the land. We now know that it is right and just for it to make such payment, especially when they have enjoyed these incentives for more than 27 years,” he said.

    He continued: “Senate will not renege on its promise to amend the Act that is guiding the operation of the NLNG. The National Assembly can amend the Constitution of Nigeria. The legislative arm has the power to amend the Act that is guiding the existence or operation of an entity including the NLNG.

    “The National Assembly  has been empowered by Section 4 of the Constitution to legislate on issues affecting the existence of a corporate entity called Nigeria and the Senate is working in accordance with the interest of Nigerians.

    “There is no law in perpetuity. There is no law anywhere in the world that says that an Act cannot be amended or touched by a legally constituted authority like the Senate. Nigeria is a sovereign nation and has the duty to review an Act that shortchanged its patrimony. Now, what is wrong in asking the NLNG  that is a gas processing company, to make contributions regarding its operation, as provided by the constitution. Those people that have been saying that the Senate should not tamper with the Act that sets up NLNG are basically saying the law guiding the operation of the company should be there forever. We at the National Assembly cannot do that. We are a sovereign nation and there is nowhere in the world where an Act cannot be reviewed or amended.”

  • Dangote refinery to hire local vendors

    Dangote refinery to hire local vendors

    •NCDMB to launch NCI Fund with $200 million

    Dangote Refinery will select competent local vendors from the Nigerian Oil and Gas Industry Joint Qualification System (NOGICJQS), to participate in its plant’s construction, its Chief Operating Officer, Mr Giuseppe Surace, has said.

    The NOGICJQS is a database of indigenous capacities in the oil and gas industry, managed by the Nigerian Content Development and Monitoring Board (NCDMB).

    Surace spoke during a technical meeting between top officials of the company and the NCDMB at the plant’s site in Lekki, Lagos.

    According to the NCDMB, Surace confirmed that there were many advantages in patronising the local market.  “Nigerian companies will get the first right of refusal. We will procure anything that is available in Nigeria,”he was quoted as saying.

    Surace noted that there were several Nigerian Content opportunities in the company’s refinery and gas gathering projects, but reiterated that interested companies must submit competitive bids and have technical capabilities. He explained that the project is a private investment, hence the strategy is to get the best quality anywhere in the world at the most competitive price.

    He advised local vendors to quote reasonable prices when bidding for industry projects rather than think that they will win jobs because of the Nigerian Content Act regardless of how high their quotations are.

    He said Dangote Group engaged the services of some Nigerian companies for its fertilizer project, which had reached an advanced stage of development and was committed to do same for the 650,000 barrels per day refinery project slated for completion in October 2019.

    NCDMB  Executive Secretary,  Simbi Wabote promised that the Board would assist the company in the utilisation of the NOGICJQS database to ensure that it maximises local personnel usage, goods and services in the construction and operations phase of the project. He said: “The Nigerian Content Act applies to every player in the Nigerian oil and gas industry and not just international companies. If Nigerian companies and investors procure everything from abroad then the essence of the Act will be defeated.”

    Wabote maintained that slight cost differentials between Nigerian and foreign vendors should not be an excuse to export jobs, stressing that the opportunity cost of creating employment for Nigerians, developing local capacity, retaining money spent in the economy and engendering a safe operating environment for companies justify any marginal cost of execution charged by Nigerian vendors.

    He noted that Nigerian companies were affected by high costs of funds and powering their operations with diesel generators, assuring however that investments and initiatives by the Federal Government are already improving the power situation in the country.

    On funding, the NCDMB chief said the Board had obtained necessary approval to relaunch the Nigerian Content Intervention Fund (NCI Fund). According to him, the Fund available for lending to qualified oil and gas players, had been increased from $100 million to $200 million to ensure that more deserving companies benefit at the same time, adding that the Fund will be disbursed by the Bank of Industry (BoI) at eight per cent interest rate to be repaid within five years.

    Wabote also sought Dangote Refinery’s collaboration to build infrastructural and human capacity that will support the  operations  phase of the project, stating that “operations last for many years and there are huge opportunities to tap in from the Local Content perspective.”

    He charged the management of the refinery to develop and submit a list of support businesses that will be needed in the operations phase of the refinery for the Board to build the capacity of Nigerians ahead of the project commencement.